Our Lawyers Consider Impact of Hobby Lobby

Earlier this year, the United States Supreme Court issued a ruling recognizing religious objections to portions of the Affordable Care Act (“ACA”), commonly referred to as “Obamacare”. In Burnwell v. Hobby Lobby Stores, the Supreme Court ruled that the federal government cannot force owners of closely-held (non-publicly traded), for-profit corporation to provide insurance coverage for contraception methods violating their owner’s religious beliefs. This is the first time the Supreme Court has recognized a for-profit corporation’s claim of religious belief. The decision, however, does not address whether closely-held corporations are protected by the free-exercise of religion clause of the First Amendment of the Constitution. Employment lawyers are still considering the possible long-term impact of the ruling.

The Affordable Care Act

In 2010, Congress passed the Affordable Care Act (“ACA”). The ACA relies on the Health Resources and Services Administration to specify what kinds of preventative care women should be covered for in certain employer-based health plans.

Shortly after the ACA was passed, the United States Department of Health and Human Services issued regulations requiring non-exempt employees to provide female employees with insurance coverage for certain contraceptive methods. Companies refusing to provide their female employees with insurance to cover these contraceptives are fined $100.00 per day. Following the Supreme Court’s decision in Burnwell v. Hobby Lobby, however, closely-held corporations are not required to provide contraceptives to their female employees if it violates the employer’s religious beliefs.

Three Closely-Held Corporations Object To The ACA Regulations On Contraception

Three closely-held, for-profit corporations objected to Department of Health and Human Services’ regulations. They argued that providing female employees with contraception violated their religious belief of life beginning at conception. Two of the closely-held corporations believed that life begins at conception, which they equated with fertilization, and objected to providing insurance coverage for their female employees for four FDA-approved contraceptives they believed prevented implantation of a fertilized egg (many doctors and scientists disagree), which they believed constituted an abortion.

On June 31, 2014, the United States Supreme Court decided in favor of the closely-held corporations. The Supreme Court held that the contraceptive mandate created a substantial burden on the employers’ exercise of religion and was not the least restrictive means of furthering the government’s interest in guaranteeing access to contraceptive methods. The Supreme Court emphasized that its ruling was only applicable to closely-held, for-profit corporations.

Implications Of Burnwell v. Hobby Lobby For Employers And Employees

This decision allows closely-held, for-profit corporations to opt out of providing employees with insurance coverage for contraception methods conflicting with the employers’ religious beliefs. Even though the Supreme Court limited its holding to closely-held, for-profit corporations, many female employees could potentially be affected. In fact, closely-held corporations employ fifty-two percent of the United States labor force and make up ninety percent of United States companies. In the wake of this decision, several closely-held American companies have decided to halt contraceptive coverage.

It remains to be seen whether this decision will remain limited to non-public corporations, or if it will be expanded in future decisions to recognize a right of religious freedom in larger, publicly-held companies. The Hobby Lobby case is one of several cases decided in recent years by the Supreme Court appearing to recognize certain rights in corporations that traditionally have been considered rights that only individuals possess. Cincinnati employment lawyers and their clients continue to watch the Supreme Court and other federal courts for guidance as to the extent of the rights of employers and employees in healthcare and other areas of the law.